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31 Watch out for perverse incentives. Elements of the Balanced Scorecard approach are evident Keep measurement functions independent. in several states that rely on customer satisfaction as a Focus on maximizing the use of performance data. balancing measure to augment engineering and financial performance data. Likewise, measures of environmental The Government Performance Results Act of 1993 codi- quality are increasingly prominent. fied many of the private-sector lessons into a framework for federal performance management. Inherent in the Act are the States are increasingly careful about how they specify per- key findings of earlier performance measurement research: formance measures, because they realize that they can be critically important in driving decisions and actions. Mea- A strategic plan and strategic mission statement are the suring an aspect of performance encourages the agency to foundation for performance measurement. focus upon that aspect, sometimes to the neglect of other General goals and objectives are to be established and important functions. Skewing organizational behavior can be are to be described in terms of outcomes, not inputs or an unintended consequence of performance measurement, outputs. particularly if measures are narrow or are not tempered by Strategies for achieving the objectives are to be identified. qualitative considerations. Performance measures should be defined that measure the State of the Practice, cited above, notes significant variation effectiveness of the strategies in achieving the outcomes. among the states' use of measures. A few agencies, though, Key factors beyond the agency's control that can influence have mature systems, all of which could be characterized as the achievement of the goals need to be identified. possessing: Processes will be established to evaluate the effectiveness of the measures and to update them as needed. a range of sophisticated measurement systems in place; the alignment of measures with performance-oriented goals, objectives, standards, and targets; useful performance-reporting processes tailored for vari- The Maturation of Public-Sector ous audiences and management needs; and Performance Measurement systematic procedures for reviewing performance data By the early 2000s, the use of performance measures in and using the information to strengthen performance and public-sector transportation agencies was widespread and decision making. exhibited evolution similar to that reported earlier in the pri- vate sector. A 2004 report, Performance Measurement in Trans- The report also cited a set of continuing challenges that portation: State of the Practice,2 notes that use of performance include: measures among transportation agencies has expanded sig- nificantly and that agencies have become increasing informed Agreeing on common terminology; and insightful in using them. In reviewing more than a decade Developing measures for cross-modal comparisons of of performance measurement by departments of transpor- performance; tation (DOTs) and local transportation agencies, the report Developing freight measures; notes the following trends: Getting broader public and constituency feedback and bal- ancing that with engineering and planning criteria; Although more states are using measures, the leading states Implementing useful benchmarking criteria for compara- are involved in second- and third-generation measures, tive analysis; and which are increasingly sophisticated. Institutionalizing performance measurement and strate- States are relying more on measures that emphasize strate- gic planning to prevent their being derailed by changes in gic outcomes and customer-focused measures. administration. States that are early in the use of measures tend to prolifer- ate them, whereas more mature states tend to focus upon a By the end of the decade, the use of performance measures "vital few." was common in the majority of states. AASHTO's Standing The use of measures to support broader planning, man- Committee on Performance Management supports a web- agement, and decision-making processes is becoming site linking performance reports or annual reports to 41 state common. transportation agencies. Although not definitive, the links There is increased reporting directly to the public and indicated that more than 50 percent of the states produced policy makers. some kind of performance reports.